The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture has urged the Federal Government to devise effective means of managing the country’s debt profile to prevent the economy from shutting down.
NACCIMA President, John Udeagbala, stated this during the chamber’s state of the nation press briefing held in Lagos on Monday.
Udeagbala said Nigeria had come to a terrible cross-road as it was worrisome that the country would be borrowing N11.34tn to finance over 50 per cent of the 2023 budget.
He said as the leading member of the Organised Private Sector, NACCIMA strongly advocated less dependence on debt financing due to its adverse impact on the economy.
Udeagbala further stated that NACCIMA was worried about the negative impact of the recently passed Finance Bill 2022 by the Senate on the growth and development of private businesses.
He said the 2022 Finance Bill attempts to add more financial burden on the private sectors that are presently struggling to keep businesses afloat.
He said, “Scarcity of foreign currency, poor business environment, high cost of energy amongst other macroeconomic indices are heavyweights that toll against businesses, especially the organized private sector, so that any further tax increases on businesses may simply lead to shutting down of many companies and worsen the already bad unemployment crisis in the country.
“It is barely two years now since when the government raised education tax from two per cent to 2.5 per cent. Many companies are struggling to adjust to that and now the same is being raised to three per cent. VAT has also been raised from five per cent to 7.5 per cent over the same period.”
“This is besides over 50 other forms of taxes and levies being imposed on the OPSN by both federal, states and local governments. There are yet other tax bills currently at the National Assembly seeking to impose taxes and levies on business establishments and companies, such as the NITDA levy, National Social Insurance Trust Fund, Company Income Tax among others. Considering the various challenges and economic difficulties faced by the OPSN.”
On the forthcoming General Elections, Udeagbala said NACCIMA was worried about the overshadowing effect of politics on the economy
He added that the government cannot afford to make mistakes in the organisation of a free and fair election, as this will help to position the nation among the comity of nations which will result in more foreign direct investments.
“You may have noticed the reoccurring pattern where Nigeria’s presidential candidates run to Chatham House in London to discuss the challenges of Nigeria’s political economy instead of engaging with the OPSN here in Nigeria.
“The OPSN and Nigerian people are the ones who bear the brunt of economic hardships in Nigeria, so why go to Chatham House London to discuss domestic challenges that are domiciled in Nigeria? NACCIMA and the OPSN want the establishment of our own Chatham House in Nigeria, where our socio-economic challenges are discussed, and solutions proffered to the challenges locally,” Udeagbala said.
The chamber also expressed worry that the GDP growth rate has been dropping on a quarter-by-quarter basis since the 5.01 per cent recorded in the second quarter of 2021. The implication of this, Udeagbala said, is that economic activities are contracting, and businesses are dying.
“The private sector has suffered humongous losses due to the absence of turnaround targets for the basic needs of businesses in Nigeria,” Udeagbala said.
